12 U.S.C. § 3103 | Interstate banking by foreign banks

(a)

Interstate branching and agency operations

(1)

Federal branch or agency

section 36(g) of this title section 1831u of this titleSubject to the provisions of this chapter and with the prior written approval by the Board and the Comptroller of the Currency of an application, a foreign bank may establish and operate a Federal branch or agency in any State outside the home State of such foreign bank to the extent that the establishment and operation of such branch would be permitted under or if the foreign bank were a national bank whose home State is the same State as the home State of the foreign bank.

(2)

State branch or agency

Subject to the provisions of this chapter and with the prior written approval by the Board and the appropriate State bank supervisor of an application, a foreign bank may establish and operate a State branch or agency in any State outside the home State of such foreign bank to the extent that such establishment and operation would be permitted under section 1828(d)(4) or 1831u of this title if the foreign bank were a State bank whose home State is the same State as the home State of the foreign bank.

(3)

Criteria for determination

In approving an application under paragraph (1) or (2), the Board and (in the case of an application under paragraph (1)) the Comptroller of the Currency—

(A)

section 3105(d) of this title shall apply the standards applicable to the establishment of a foreign bank office in the United States under ;

(B)

may not approve an application unless the Board and (in the case of an application under paragraph (1)) the Comptroller of the Currency—

(i)

section 36 of this title section 1831u of this title determine that the foreign bank’s financial resources, including the capital level of the bank, are equivalent to those required for a domestic bank to be approved for branching under and ; and

(ii)

consult with the Secretary of the Treasury regarding capital equivalency; and

(C)

section 1831u(b) of this title shall apply the same requirements and conditions to which an application for an interstate merger transaction is subject under paragraphs (1), (3), and (4) of .

(4)

Operation

section 1831u of this title section 1813 of this title section 1831u of this titleSubsections (c) and (d)(2) of shall apply with respect to each branch and agency of a foreign bank which is established and operated pursuant to an application approved under this subsection in the same manner and to the same extent such provisions of such section apply to a domestic branch of a national or State bank (as such terms are defined in ) which resulted from a merger transaction under such .

(5)

Exclusive authority for additional branches

Except as provided in this section, a foreign bank may not, directly or indirectly, acquire, establish, or operate a branch or agency in any State other than the home State of such bank.

(6)

Requirement for a separate subsidiary

section 36 of this title section 1831u of this titleIf the Board or the Comptroller of the Currency, taking into account differing regulatory or accounting standards, finds that adherence by a foreign bank to capital requirements equivalent to those imposed under and could be verified only if the banking activities of such bank in the United States are carried out in a domestic banking subsidiary within the United States, the Board and (in the case of an application under paragraph (1)) the Comptroller of the Currency may approve an application under paragraph (1) or (2) subject to a requirement that the foreign bank or company controlling the foreign bank establish a domestic banking subsidiary in the United States.

(7)

Additional authority for interstate branches and agencies of foreign banks, upgrades of certain foreign bank agencies and branches

Notwithstanding paragraphs (1) and (2), a foreign bank may—

(A)

with the approval of the Board and the Comptroller of the Currency, establish and operate a Federal branch or Federal agency or, with the approval of the Board and the appropriate State bank supervisor, a State branch or State agency in any State outside the foreign bank’s home State if—

(i)

the establishment and operation of such branch or agency is permitted by the State in which the branch or agency is to be established; and

(ii)

12 U.S.C. 611 in the case of a Federal or State branch, the branch receives only such deposits as would be permitted for a corporation organized under section 25A of the Federal Reserve Act [ et seq.]; or

(B)

with the approval of the Board and the relevant licensing authority (the Comptroller in the case of a Federal branch or the appropriate State supervisor in the case of a State branch), upgrade an agency, or a branch of the type referred to in subparagraph (A)(ii), located in a State outside the foreign bank’s home State, into a Federal or State branch if—

(i)

the establishment and operation of such branch is permitted by such State; and

(ii)

such agency or branch—

(I)

September 29, 1994 was in operation in such State on the day before ; or

(II)

section 1831u(a)(5) of this title has been in operation in such State for a period of time that meets the State’s minimum age requirement permitted under .

(8)

Continuing requirement for meeting community credit needs after initial interstate entry by acquisition

(A)

In general

12 U.S.C. 2902 12 U.S.C. 2901If a foreign bank acquires a bank or a branch of a bank, in a State in which the foreign bank does not maintain a branch, and such acquired bank is, or is part of, a regulated financial institution (as defined in section 803 of the Community Reinvestment Act of 1977 []), the Community Reinvestment Act of 1977 [ et seq.] shall continue to apply to each branch of the foreign bank which results from the acquisition as if such branch were a regulated financial institution.

(B)

Exception for branch that receives only deposits permissible for an Edge Act corporation

12 U.S.C. 611Paragraph (1) shall not apply to any branch that receives only such deposits as are permissible for a corporation organized under section 25A of the Federal Reserve Act [ et seq.] to receive.

(9)

Home State of domestic bank defined

For purposes of this subsection, the term “home State” means—

(A)

with respect to a national bank, the State in which the main office of the bank is located; and

(B)

with respect to a State bank, the State by which the bank is chartered.

(b)

Continuance of lawful interstate banking operations previously commenced

July 27, 1978September 29, 1994September 29, 1994September 29, 1994September 29, 1994Unless its authority to do so is lawfully revoked otherwise than pursuant to this section, a foreign bank, notwithstanding any restriction or limitation imposed under subsection (a) of this section, may establish and operate, outside its home State, any State branch, State agency, or bank or commercial lending company subsidiary which commenced lawful operation or for which an application to commence business had been lawfully filed with the appropriate State or Federal authority, as the case may be, on or before . Notwithstanding subsection (a), a foreign bank may continue to operate, after , any Federal branch, State branch, Federal agency, State agency, or commercial lending company subsidiary which such bank was operating on the day before , to the extent the branch, agency, or subsidiary continues, after , to engage in operations which were lawful under the laws in effect on the day before .

(c)

Determination of home State of foreign bank

For the purposes of this section—

(1)

in the case of a foreign bank that has any branch, agency, subsidiary commercial lending company, or subsidiary bank in more than 1 State, the home State of the foreign bank is the 1 State of such States which is selected to be the home State by the foreign bank or, in default of any such selection, by the Board; and

(2)

in the case of a foreign bank that does not have a branch, agency, subsidiary commercial lending company, or subsidiary bank in more than 1 State, the home State of the foreign bank is the State in which the foreign bank has a branch, agency, subsidiary commercial lending company, or subsidiary bank.

(d)

Clarification of branching rules in case of foreign bank with domestic bank subsidiary

In the case of a foreign bank that has a domestic bank subsidiary within the United States—

(1)

the fact that such bank controls a domestic bank shall not affect the authority of the foreign bank to establish Federal and State branches or agencies to the extent permitted under subsection (a); and

(2)

section 36(g) of this title the fact that the domestic bank is controlled by a foreign bank which has Federal or State branches or agencies in States other than the home State of such domestic bank shall not affect the authority of the domestic bank to establish branches outside the home State of the domestic bank to the extent permitted under or section 1828(d)(4) or 1831u of this title, as the case may be.

Pub. L. 95–369, § 5Sept. 17, 197892 Stat. 613 Pub. L. 103–328, title ISept. 29, 1994108 Stat. 2354 Pub. L. 106–102, title VII, § 732Nov. 12, 1999113 Stat. 1478(, , ; , §§ 104, 107(f), , , 2361; , , .)

Editorial Notes

References in Text

section 3101 of this titleFor definition of “this chapter”, referred to in subsec. (a)(1), (2), see References in Text note set out under .

Pub. L. 95–128Oct. 12, 197791 Stat. 1147 section 2901 of this titleThe Community Reinvestment Act of 1977, referred to in subsec. (a)(8)(A), is title VIII of , , , which is classified generally to chapter 30 (§ 2901 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

section 611 of this titleSection 25A of the Federal Reserve Act, referred to in subsec. (a)(7)(A)(ii), (8)(B), popularly known as the Edge Act, is classified to subchapter II (§ 611 et seq.) of chapter 6 of this title. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Amendments

Pub. L. 106–1021999—Subsec. (a)(7). amended heading and text of par. (7) generally. Prior to amendment, text read as follows: “Notwithstanding paragraphs (1) and (2), a foreign bank may, with the approval of the Board and the Comptroller of the Currency, establish and operate a Federal branch or Federal agency or, with the approval of the Board and the appropriate State bank supervisor, a State branch or State agency in any State outside the foreign bank’s home State if—

“(A) the establishment and operation of a branch or agency is expressly permitted by the State in which the branch or agency is to be established; and

“(B) in the case of a Federal or State branch, the branch receives only such deposits as would be permissible for a corporation organized under section 25A of the Federal Reserve Act.”

Pub. L. 103–3281994—Subsec. (a). , §§ 104(a), 107(f), inserted heading and substituted provisions consisting of pars. (1) to (9) for former provisions relating to limitations on interstate banking by foreign banks.

Pub. L. 103–328, § 104(b)September 29, 1994September 29, 1994September 29, 1994September 29, 1994Subsec. (b). , inserted at end “Notwithstanding subsection (a), a foreign bank may continue to operate, after , any Federal branch, State branch, Federal agency, State agency, or commercial lending company subsidiary which such bank was operating on the day before , to the extent the branch, agency, or subsidiary continues, after , to engage in operations which were lawful under the laws in effect on the day before .”

Pub. L. 103–328, § 104(d)Subsec. (c). , amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “For the purposes of this section, the home State of a foreign bank that has branches, agencies, subsidiary commercial lending companies, or subsidiary banks, or any combination thereof, in more than one State, is whichever of such States is so determined by election of the foreign bank, or, in default of such election, by the Board.”

Pub. L. 103–328, § 104(c)Subsec. (d). , added subsec. (d).